THE CONSUMER PROTECTION ACT OVERVIEW 1
THE PURPOSE OF THE ACT TO PROHIBIT UNFAIR MARKETING AND BUSINESS PRACTISES; TO PROTECT CONSUMERS FROM UNCONSCIONABLE, UNFAIR, UNREASONABLE, UNJUST, IMPROPER TRADE PRACTISES; IMPROVING CONSUMER AWARENESS AND INFORMATION AND ENCOURAGING RESPONSIBLE AND INFORMED CONSUMER CHOICE AND BEHAVIOUR. 2
IMPORTANCE NON COMPLIANCE WILL RESULT IN TRANSACTIONS BEING VOID; THE ACT PROVIDES CONSUMERS WITH VARIOUS NEW RIGHTS; SUPPLIERS HAVE NEW OBLIGATIONS TOWARDS CONSUMERS INCLUDING ACCOUNTABILITY, TRANSPARANCY, STRICT LIABILITY; A PERSON CONVICTED OF AN OFFENCE CAN BE HELD LIABLE FOR A FINE OR TO IMPRISONMENT; ADMINISTRATIVE PENALTIES OF UP TO 10% OF A SUPPLIER S TURNOVER COULD BE IMPOSED IN RESPECT OF PROHIBITED OR REQUIRED CONDUCT. 3
APPLICATION OF THE ACT THE ACT APPLIES TO- EVERY TRANSACTION FOR THE SUPPLY (OR POTENTIAL SUPPLY ) OF GOODS OR SERVICES ENTERED INTO IN THE ORDINARY COURSE OF BUISNESS, OCCURRING WITHIN THE REPUBLIC, (UNLESS EXEMPTED); THE PROMOTION OF ANY GOODS OR SERVICES, OR THE PROMOTION OF THE SUPPLY OF ANY GOODS OR SERVICES, WITHIN THE REPUBLIC OF SOUTH AFRICA. 4
THE ACT EXTENDS TO A TRANSACTION IRRESPECTIVE OF WHETHER THE SUPPLIER: RESIDES OR HAS ITS PRINCIPAL OFFICE WITHIN OR OUTSIDE THE REPUBLIC; OPERATES ON A FOR-PROFIT BASIS OR OTHERWISE; OR IS AN INDIVIDUAL, JURISTIC PERSON, PARTNERSHIP,TRUST, ORGAN OF STATE, AN ENTITY OWNED OR DIRECTED BY AN ORGAN OF STATE, A PERSON CONTRACTED OR LICENSED BY AN ORGAN OF STATE TO OFFER OR SUPPLY ANY GOODS OR SERVICES, OR IS A PUBLIC-PRIVATE PARTNERSHIP (APPLICATION OF THE ACT ON ALL MUNICIPALITIES OTHER THAN HIGH CAPACITY MUNICPALITIES HAS BEEN DEFERRED); OR IS REQUIRED OR LICENSED IN TERMS OF ANY PUBLIC REGULATION TO MAKE THE SUPPLY OF THE PARTICULAR GOODS OR SERVICES AVAILABLE TO ALL OR PART OF THE PUBLIC. 5
THE ACT DOES NOT APPLY TO: TRANSACTIONS IN WHICH THE STATE IS THE CONSUMER; TRANSACTIONS IN WHICH THE CONSUMER IS A JURISTIC PERSON WITH ASSET VALUE OR ANNUAL TURNOVER EQUAL TO OR EXCEEDING TWO MILLION RAND; AN INDUSTRY EXEMPTED BY THE MINISTER; TRANSACTIONS WHICH CONSTITUTE CREDIT AGREEMENTS UNDER THE NATIONAL CREDIT ACT, BUT THE GOODS OR SERVICES THAT ARE THE SUBJECT OF THE CREDIT AGREEMENT ARE NOT EXCLUDED FROM THE AMBIT OF THIS ACT; SERVICES TO BE SUPPLIED UNDER AN EMPLOYMENT CONTRACT. 6
IMPORTANT DEFINITIONS WHO IS A CONSUMER? A PERSON TO WHOM GOODS AND SERVICES ARE MARKETED IN THE ORDINARY COURSE OF THE SUPPLIERS BUSINESS; A PERSON WHO HAS ENTERED INTO A TRANSACTION WITH A SUPPLIER IN THE ORDINARY COURSE OF THE SUPPLIER S BUSINESS (UNLESS THE TRANSACTION IS EXEMPTED AS STATED BEFORE); ACTUAL USERS OF GOODS OR RECIPIENTS OF SERVICES (IRRESPECTIVE OF WHETHER THAT PERSON WAS A PARTY TO THE TRANSACTION OR PAID FOR THE GOODS OR SERVICES); FRANCHISEES. 7
WHO IS A SUPPLIER? A PERSON WHO MARKETS, PROMOTES OR SUPPLIES GOODS OR SERVICES. WHAT DOES SUPPLY MEAN? IN RELATION TO GOODS, INCLUDES, SELL, EXCHANGE AND HIRE IN THE ORDINARY COURSE OF BUSINESS FOR CONSIDERATION; IN RELATION TO SERVICES, MEANS TO SELL THE SERVICES, OR TO PERFORM OR CAUSE THEM TO BE PERFORMED OR PROVIDED, OR TO GRANT ACCESS TO ANY PREMISES, EVENT, ACTIVITY OR FACILITY IN THE ORDINARY COURSE OF BUSINESS FOR CONSIDERATION. 8
WHAT DOES MARKET MEAN? TO PROMOTE OR SUPPLY GOODS OR SERVICES; WHAT DOES PROMOTE MEAN? TO ADVERTISE, DISPLAY OR OFFER TO SUPPLY ANY GOODS OR SERVICES IN THE ORDINARY COURSE OF BUSINESS TO ALL OR PART OF THE PUBLIC FOR CONSIDERATION; TO MAKE ANY REPRESENTATION IN THE ORDINARY COURSE OF BUSINESS THAT COULD REASONABLY BE INFERRED AS EXPRESSING A WILLINGNESS TO SUPPLY ANY GOODS OR SERVICES FOR CONSIDERATION; TO ENGAGE IN OTHER CONDUCT IN THE ORDINARY COURSE OF BUSINESS THAT MAY REASONABLY BE CONSTRUED TO BE AN INDUCEMENT OR ATTEMPTED ENDUCEMENT TO A PERSON TO ENGAGE IN A TRANSACTION. 9
TRANSACTION MEANS IN RESPECT OF A PERSON ACTING IN THE ORDINARY COURSE OF BUSINESS:- AN AGREEMENT BETWEEN OR AMONG THAT PERSON AND ONE OR MORE OTHER PERSONS FOR THE SUPPLY OR POTENTIAL SUPPLY OF ANY GOODS OR SERVICES IN EXHANGE FOR CONSIDERATION; OR THE SUPPLY BY THAT PERSON OF ANY GOODS TO OR AT THE DIRECTION OF A CONSUMER FOR CONSIDERATION; OR THE PERFORMANCE BY, OR AT THE DIRECTION OF, THAT PERSON OF ANY SERVICES FOR OR AT THE DIRECTION OF A CONSUMER FOR CONSIDERATION; OR FRANCHISES 10
WHAT ARE GOODS? ANYTHING MARKETED FOR HUMAN CONSUMPTION; ANY TANGIBLE OBJECT, INCLUDING ANY MEDIUM ON WHICH ANYTHING IS OR MAY BE WRITTEN OR ENCODED; ANY LITERATURE, MUSIC, PHOTOGRAPH, MOTION PICTURE, GAME, INFORMATION, DATA, SOFTWARE, CODE OR OTHER INTANGIBLE PRODUCT WRITTEN OR ENCODED ON ANY MEDIUM, OR A LICENCE TO USE ANY SUCH INTANGIBLE PRODUCT; A LEGAL INTEREST IN LAND OR ANY OTHER IMMOVABLE PROPERTY, OTHER THAN AN INTEREST THAT FALLS WITHIN THE DEFINITION OF SERVICE GAS, WATER AND ELECTRICITY; 11
WHAT ARE SERVICES? ANY WORK OR UNDERTAKING PERFORMED BY ONE PERSON FOR THE DIRECT OR INDIRECT BENEFIT OF ANOTHER; THE PROVISION OF ANY EDUCATION, INFORMATION, ADVICE OR CONSULTATION, EXCEPT ADVICE THAT IS SUBJECT TO REGULATION IN TERMS OF THE FINANCIAL ADVISORY AND INTERMEDIARY SERVICES ACT, 2002 (ACT NO.37 OF 2002); ANY BANKING SERVICES, OR RELATED OR SIMILAR FINANCIAL SERVICES, OR THE UNDERTAKING, UNDERWRITING OR ASSUMPTION OF ANY RISK BY ONE PERSON ON BEHALF OF ANOTHER, EXCEPT TO THE EXTENT THAT ANY SUCH SERVICE- CONSTITUTES ADVICE OR INTERMEDIARY SERVICES THAT IS SUBJECT TO REGULATION IN TERMS OF THE FINANCIAL ADVISORY AND INTERMEDIARY SERVICES ACT, 2002 (ACT NO. 37 OF 2002); OR IS REGULATED IN TERMS OF THE LONG-TERM INSURANCE ACT, 1998 (ACT NO. 52 OF 1998), OR THE SHORT-TERM INSURANCE ACT, 1998 (ACT NO. 53 OF 1998); THE TRANSPORTATION OF AN INDIVIDUAL OR ANY GOODS; 12
THE PROVISION OF- ANY ACCOMMODATION; ANY ENTERTAINMENT OR SIMILAR INTANGIBLE PRODUCT OR ACCESS TO ANY SUCH ENTERTAINMENT OR INTANGIBLE PRODUCT; ACCESS TO ANY ELECTRONIC COMMUNICATION INFRASTRUCTURE; ACCESS, OR OF A RIGHT OF ACCESS, TO AN EVENT OR TO ANY PREMISES, ACTIVITY OR FACILITY; OR ACCESS TO OR USE OF ANY PREMISES OR OTHER PROPERTY IN TERMS OF A RENTAL; A RIGHT OF OCCUPANCY OF, OR POWER OR PRIVILEGE OVER OR IN CONNECTION WITH, ANY LAND OR OTHER IMMOVABLE PROPERTY, OTHER THAN IN TERMS OF A RENTAL; AND ; RIGHTS OF A FRANCHISEE IN TERMS OF A FRANCHISE AGREEMENT, IRRESPECTIVE OF WHETHER THE PERSON PROMOTING, OFFERING OR PROVIDING THE SERVICES PARTICIPATES IN, SUPERVISES OR ENGAGES DIRECTLY OR INDIRECTLY IN THE SERVICE. 13
FUNDAMENTAL RIGHTS THE ACT PROVIDES FOR 9 FUNDAMENTAL CONSUMER RIGHTS BEING: THE RIGHT OF EQUALITY IN CONSUMER MARKET: THE CONSUMER S RIGHT TO PRIVACY; THE CONSUMER S RIGHT TO CHOOSE; RIGHT TO DISCLOSURE AND INFORMATION; RIGHT TO FAIR AND RESPONSIBLE MARKETING; RIGHT TO FAIR AND HONEST DEALING; RIGHT TO FAIR, JUST AND REASONABLE TERMS AND CONDITIONS; RIGHT TO FAIR VALUE, GOOD QUALITY AND SAFETY; SUPPLIER S ACCOUNTABILITY TO CONSUMERS. 14
RIGHT OF EQUALITY IN CONSUMER MARKET A SUPPLIER OF GOODS OR SERVICES MUST NOT UNFAIRLY- EXCLUDE ANY PERSON OR CATEGORY OF PERSONS FROM ACCESSING ANY GOODS OR SERVICES OFFERED BY THE SUPPLIER; GRANT ANY PERSON OR CATEGORY OF PERSONS EXCLUSIVE ACCESS TO ANY GOODS OR SERVICES OFFERED BY THE SUPPLIER; ASSIGN PRIORITY OF SUPPLY OF ANY GOODS OR SERVICES OFFERED BY THE SUPPLIER TO ANY PERSON OR CATEGORY OF PERSONS; SUPPLY A DIFFERENT QUALITY OF GOODS OR SERVICES TO ANY PERSONS OR CATEGORY OF PERSONS; CHARGE DIFFERENT PRICES FOR ANY GOODS OR SERVICES TO ANY PERSONS OR CATEGORY OF PERSONS; TARGET OR EXCLUDE PARTICULAR COMMUNITIES, DISTRICTS, POPULATIONS OR MARKET SEGMENTS; ON THE BASIS OF ONE OR MORE GROUNDS OF UNFAIR DISCRIMINATION AS CONTEMPLATED IN THE CONSTITUTON) (THERE ARE, HOWEVER, REASONABLE GROUNDS FOR DIFFERENTIAL TREATMENT IN SPECIFIC CIRCUMSTANCES FOR EXAMPLE, ON THE BASIS OF MINORS BEING GRANTED ACCESS ONLY WITH CONSENT OF PARENT OR GUARDIAN, EXCLUSIVE USE FOR PENSIONERS ETC) 15
THE CONSUMER S RIGHT TO PRIVACY THE CONSUMER HAS THE RIGHT TO: RESTRICT UNWANTED DIRECT MARKETING (INCLUDES UNWANTED OR UNSOLICTED CORRESPONDENCE, SMS TELEPHONE CALLS, LETTER OR EMAILS AND TO DECLINE PARTICIPATION IN MARKETING SURVEYS)- DIRECT MARKETERS SHOULD INCLUDE AN OPT OUT OPTION; REGISTER A PRE-EMPTIVE BLOCK ON A REGISTER TO BE OPERATED OR RECOGNISED BY THE COMMISSION (OUR UNDERSTANDING IS THAT NO REGISTER IS CURRENTLY IN EXISTANCE AND THAT THE COMMISSION IS STILL IN THE PROCESS OF APPROVING BIDS FOR RECOGNITION AS AUTHORITIVE REGISTRIES, HOWEVER, THE DIRECT MARKETING ASSOCIATION OF SOUTH AFRICA SHOULD PROBABLY RECEIVE RECOGNITION FOR THEIR OPT OUT REGISTER IN DUE COURSE, WHICH REGISTER IS CURRENTLY ONLY USED BY THEIR MEMBERS) 16
THE CONSUMER S RIGHT TO CHOOSE A CONSUMER HAS THE RIGHT TO : NOT TO BE OBLIGATED TO BUY ADDITIONAL PRODUCTS OR SERVICES FROM A SUPPLIER OR DESIGNATED THIRD PARTY UNLESS THE SUPPLIER CAN SHOW THE ECONOMIC OR CONVENIENCE BENEFIT; CANCEL A FIXED TERM AGREEMENT UPON EXPIRY WITHOUT PENALTY OR CHARGE AND AT ANY OTHER TIME BY GIVING THE SUPPLIER 20 BUSINESS DAYS NOTICE IN WRTING (IN WHICH EVENT THE SUPPLIER MAY IMPOSE A REASONABLE CANCELLATION PENALTY); REQUEST PRE-AUTHORISATION FOR REPAIR OR MAINTENANCE SERVICES; RESCIND A CONTRACT WHICH AROSE AS A RESULT OF DIRECT MARKETING WITHIN A COOLING OFF PERIOD OF 5 BUSINESS DAYS WITHOUT ANY CHARGE OR PENALTY; 17
A SUPPLIER MUST REFUND ANY PAYMENTS RECEIVED FROM THE CONSUMER WITHIN 15 BUSINESS DAYS SUBSEQUENT TO CANCELLATION IN TERMS OF THE COOLING OFF PROVISIONS; CANCEL ADVANCED RESERVATIONS, BOOKING OR ORDERS (THE SUPPLIER MAY CHARGE A REASONABLE FEE FOR THE CANCELLATION OF SUCH BOOKING OR RESERVATION-UNLESS AS A RESULT OF DEATH OR HOSPITALISATION); A CONSUMER IS NOT RESPONSIBLE FOR ANY LOSS OR DAMAGE TO ANY GOODS DISPLAYED BY A SUPPLIER UNLESS THE CONSUMER S CONDUCT AMOUNTS TO GROSS NEGLIGENCE OR RECKLESSNESS, MALICIOUS BEHAVIOUR OR CRIMINAL CONDUCT; IF THE CONSUMER HAS AGREED TO PURCHASE GOODS SOLELY ON THE BASIS OF A DESCRIPTION OR SAMPLE, PROVIDED BY THE SUPPLIER, THE GOODS MUST CORRESPOND TO THAT WHICH AN ORDINARY ALERT CONSUMER WOULD BE ENTITLED TO EXPECT BASED ON THE DESCRIPTION; 18
UNLESS OTHERWISE EXPRESSLY PROVIDED FOR IN AN AGREEMENT, IT IS AN IMPLIED CONDITION OF EVERY TRANSACTION THAT THE SUPPLIER IS RESPONSIBLE TO DELIVER THE GOODS OR PERFORM THE SERVICES ON THE AGREED DATE AND TIME OR WITHIN A REASONABLE TIME; UNLESS OTHERWISE EXPRESSLY PROVIDED FOR GOODS TO BE DELIVERED REMAIN AT THE RISK OF THE SUPPLIER UNTIL THE CONSUMER HAS ACCEPTED DELIVERY; A CONSUMER HAS THE RIGHT TO RETURN GOODS (WITHIN 10 BUSINESS DAYS FROM DELIVERY) TO THE SUPPLIER AND RECEIVE A FULL REFUND (LESS A CHARGE FOR USE IF OPENED AND REPACKAGED) OF ANY CONSIDERATION PAID IF THE SUPPLIER HAS DELIVERED GOODS WHICH THE CONSUMER DID NOT HAVE THE OPPORTUNITY TO EXAMINE BEFORE DELIVERY AND THE GOODS DO NOT MEET THE REQUIRED QUALITY AND TYPE CONTEMPLATED IN TERMS OF THE APPLICABLE AGREEMENT; THE CONSUMER MAY RETURN GOODS INTENDED TO SATISFY A PARTICULAR PURPOSE COMMUNICATED TO THE SUPPLIER WITHIN 10 BUSINESS DAYS AFTER DELIVERY TO THE CONSUMER, IF THE GOODS HAVE BEEN FOUND TO BE UNSUITABLE FOR THAT PARTICULAR PURPOSE; GOODS ARE NOT RETURNABLE IF AGAINST PUBLIC REGULATION OR THE GOODS HAVE BEEN PARTIALLY OR ENTIRELY DISASSEMBLED, ALTERED OR PERMANENTLY INSTALLED, AFFIXED ATTACHED JOINED OR ADDED TO OR COMBINED WITH, OR EMBEDDED WITHIN, OTHER GOODS OR PROPERTY BY OR AT THE DIRECTION OF THE CONSUMER 19
A CONSUMER HAS THE RIGHT TO RETAIN (UNDER CERTAIN CIRCUMSTANCES AND IF THE SUPPLIER FAILS TO COLLECT WITHIN 20 BUSINESS DAYS) UNSOLICTED GOODS IN ITS POSESSION AT NO COST AND IS UNDER NO OBLIGATION TO PAY A SUPPLIER FOR UNSOLICITED SERVICES. 20
THE CONSUMER S RIGHT TO DISCLOSURE OF INFORMATION THE CONSUMER HAS THE RIGHT TO: INFORMATION IN PLAIN AN UNDERSTANDABLE LANGUAGE SO THAT THE AVERAGE PERSON COULD BE EXPECTED TO UNDERSTAND THE CONTENT, SIGNIFICANCE AND IMPORT OF THE DOCUMENT WITHOUT UNDUE EFFORT; A RETAILER MUST NOT DISPLAY ANY GOODS FOR SALE WITHOUT DISPLAYING TO THE CONSUMER A PRICE IN RELATION TO THOSE GOODS; A SUPPLIER MUST NOT REQUIRE A CONSUMER TO PAY A PRICE FOR ANY GOODS OR SERVICES HIGHER THAN THE DISPLAYED PRICE FOR THOSE GOODS OR SERVICES; OR IF MORE THAN ONE PRICE IS CONCURRENTLY DISPLAYED, HIGHER THAN THE LOWER OF THE PRICES SO DISPLAYED; A PERSON MUST NOT KNOWINGLY APPLY TO ANY GOODS A TRADE DESCRIPTION THAT IS LIKELY TO MISLEAD THE CONSUMER AS TO ANY MATTER IMPLIED OR EXPRESSED IN THAT TRADE DESCRIPTION; OR ALTER, DEFACE, COVER, REMOVE OR OBSCURE A TRADE DESCRIPTION OR TRADE MARK APPLIED TO ANY GOODS IN A MANNER CALCULATED TO MISLEAD 21
A PERSON WHO SUPPLIES, ANY GOODS THAT HAVE BEEN RECONDITIONED, REBUILT OR REMADE MUST APPLY A CONSPICUOUS NOTICE TO THOSE GOODS STATING CLEARLY THAT THEY HAVE BEEN RECONDITIONED, REBUILT OR REMADE; A SUPPLIER OF GOODS OR SERVICES MUST PROVIDE A WRITTEN RECORD OF EACH TRANSACTION TO THE CONSUMER TO WHOM ANY GOODS OR SERVICES ARE SUPPLIED, WHICH RECORD MUST INCLUDE THE SUPPLIER S FULL NAME, REGISTERED BUSINESS NAME, VAT REGISTRATION NUMBER, ADDRESS ETC; A PERSON ENGAGING IN DIRECT MARKETING AT THE PREMISES OF A CONSUMER, OR PERFORMING ANY SERVICES MUST VISIBLY WEAR A BADGE OR SIMILAR IDENTIFICATION DEVICE OR PROVIDE SUITABLE IDENTIFICATION ON REQUEST BY THE CONSUMER. 22
THE CONSUMER S RIGHT TO FAIR AND RESPONSIBLE MARKETING A PRODUCER, IMPORTER, DISTRIBUTOR, RETAILER OR SERVICE PROVIDER MUST NOT MARKET ANY GOODS OR SERVICES:- IN A MANNER THAT IS REASONABLY LIKELY TO IMPLY A FALSE OR MISLEADING REPRESENTATION CONCERNING THOSE GOODS OR SERVICES; OR IN A MANNER THAT IS MISLEADING, FRAUDULENT OR DECEPTIVE IN ANY WAY IN RESPECT OF THE NATURE, PROPERTIES, USES, PRICE, OR ANY OTHER MATERIAL ASPECT OF THE GOODS OR SERVICES; A SUPPLIER MUST NOT ADVERTISE ANY PARTICULAR GOODS OR SERVICES AS BEING AVAILABLE AT A SPECIFIED PRICE IN A MANNER THAT MAY RESULT IN CONSUMERS BEING MISLED OR DECEIVED IN ANY RESPECT RELATING TO THE ACTUAL AVAILABILITY OF THOSE GOODS OR SERVICES FROM THAT SUPPLIER, AT THAT ADVERTISED PRICE; A SUPPLIER MUST NOT PROMOTE ANY GOODS OR SERVICES, OR INDUCE A PERSON TO ACCEPT ANY GOODS OR SERVICES ON THE BASIS THAT THE GOODS OR SERVICES ARE TO BE SUPPLIED, OR THE AGREEMENT WILL AUTOMATICALLY COME INTO EXISTENCE, UNLESS THE CONSUMER DECLINES SUCH OFFER OR INDUCEMENT (SUCH AGREEMENT IS VOID). 23
A PERSON MUST NOT PROMOTE OR INDUCE A CONSUMER TO ACCEPT ANY GOODS OR SERVICES ON THE REPRESENTATION THAT THE CONSUMER WILL RECEIVE A REBATE OR COMMISSION OR OTHER BENEFIT IF THE CONSUMER GIVES THE SUPPLIER THE NAMES OF CONSUMERS; AGREEMENTS WITH PERSONS LACKING LEGAL CAPACITY ARE CAPABLE OF BEING DECLARED VOID, UNLESS THE SUPPLIER WAS INDUCED TO BELIEVE THE CONSUMER HAD LEGAL CAPACITY. 24
THE CONSUMER S RIGHT TO FAIR AND HONEST DEALING A SUPPLIER OR AN AGENT OF THE SUPPLIER MUST NOT USE PHYSICAL FORCE AGAINST A CONSUMER, COERCION, UNDUE INFLUENCE, PRESSURE, DURESS OR HARASSMENT, UNFAIR TACTICS IN CONNECTION WITH SUPPLYING GOODS OR SERVICES; A SUPPLIER MUST NOT MAKE ANY FALSE, MISLEADING OR DECEPTIVE REPRESENTATIONS CONCERNING A MATERIAL FACT IN RESPECT OF ANY GOODS OR SERVICES. 25
RIGHT TO FAIR, JUST AND REASONABLE TERMS AND CONDITIONS A SUPPLIER MUST NOT SUPPLY OR MARKET GOODS OR SERVICES AT A PRICE, OR ON TERMS, THAT ARE UNFAIR, UNREASONABLE OR UNJUST; ANY PROVISIONS OF A CONSUMER AGREEMENT WHICH PLACE RISK ON THE CONSUMER MUST BE DRAWN TO THE ATTENTION OF THE CONSUMER; THE MINISTER MAY PRESCRIBE CATEGORIES OF CONSUMER AGREEMENT THAT ARE REQUIRED TO BE IN WRITING; IF A CONSUMER AGREEMENT BETWEEN A SUPPLIER AND A CONSUMER IS IN WRITING, IT APPLIES IRRESPECTIVE OF WHETHER OR NOT THE CONSUMER SIGNS THE AGREEMENT AND THE SUPPLIER MUST PROVIDE THE CONSUMER WITH A FREE COPY OR FREE ELECTRONIC ACCESS TO A COPY OF THE TERMS AND CONDITIONS OF THAT AGREEMENT (IF AN AGREEEMENT IS NOT IN WRITING THE SUPPLIER MUST KEEP A RECORD OF TRANSACTION ENTERED INTO OVER THE TELEPHONE); A SUPPLIER MUST NOT MAKE A TRANSACTION OR AGREEMENT SUBJECT TO ANY TERM OR CONDITION IF ITS GENERAL PURPOSE OR EFFECT IS TO, INTER ALIA DEFEAT THE PURPOSES AND POLICY OF THIS ACT; MISLEAD OR DECEIVE THE CONSUMER; SUBJECT THE CONSUMER TO FRAUDULENT CONDUCT; WAIVE OR DEPRIVE A CONSUMER OF A RIGHT IN TERMS OF THE ACT; AVOID A SUPPLIER S OBLIGATION OR DUTY IN TERMS OF THE ACT; SET ASIDE OR OVERRIDE A PROVISION OF THE ACT. 26
Unfair, Unreasnable r unjust clauses The Act (Sectin 48(2)) prvides that an agreement, a term r a cnditin r a ntice t which a term may be subject is unfair, unreasnable r unjust if:- It is excessively ne-sided in favur f any persn ther than the cnsumer r ther persn t whm gds r services are t be supplied; The terms are s adverse t the cnsumer as t be inequitable; The cnsumer relied upn a false, misleading r deceptive representatin r statement f pinin prvided by the r n behalf f the supplier, t the detriment f the cnsumer; r The agreement was subject t a term r cnditin (which wuld limit the risk r liability f the supplier r any ther persn, cnstitute a risk r liability by the cnsumer r impse an bligatin n the cnsumer t indemnify the supplier r any ther persn fr a cause r be an acknwledgment f any fact by the cnsumer) and:- The term, cnditin r ntice is unfair, unreasnable, unjust r uncnscinable; r The fact, nature and effect f the term, cnditin r ntice is nt drawn t the attentin f the cnsumer in a cnspicuus manner and frm that is likely t attract the attentin f an rdinarily alert cnsumer, having regard t the circumstances and befre the earlier f the time at which the cnsumer enters int the transactin r is required r expected t ffer cnsideratin fr the transactin r agreement. The fllwing are clauses which a specifically prhibited in terms f sectin 51 f the Act A term r cnditin if its general purpse r effect is t defeat the purpses and plicy f the Act r t mislead r deceive the cnsumer r wuld subject the cnsumer t fraudulent cnduct; A waiver f the cnsumer s rights under the Act; An avidance f a supplier s bligatins under the Act; A term r cnditin which purprts t set aside r verride the effect f any prvisin f the Act r authrise the supplier t d anything that is unlawful in terms f the act r authrise the supplier t fail t d anything that is required in terms f the Act; A terms r cnditin if it purprts t limit r exempt a supplier fr liability fr any lss attributable t grss negligence f the supplier r a persn acting fr r cntrlled by the supplier r wuld cnstitute an assumptin f risk r liability by the cnsumer fr such a lss r wuld impse an bligatin n a 27
RIGHT TO FAIR VALUE, GOOD QUALITY AND SAFETY WHEN A SUPPLIERS PERFORM SERVICES FOR OR ON BEHALF OF A CONSUMER THE CONSUMER HAS A RIGHT TO, INTER ALIA:- THE TIMELY PERFORMANCE AND COMPLETION OF SERVICES AND TIMELY NOTICE OF UNAVOIDABLE DELAY IN PERFORMANCE; PERFORMANCE IN A MANNER AND QUALITY THAT PERSONS ARE GENERALLY ENTITLED TO EXPECT; IF A SUPPLIER FAILS TO PERFORM A SERVICE TO THE STANDARDS CONTEMPLATED BEFORE, THE CONSUMER MAY REQUIRE THE SUPPLIER TO EITHER REMEDY THE DEFECT OR REFUND THE CONSUMER A REASONABLE PORTION OF THE PRICE PAID FOR THE SERVICES, HAVING REGARD TO THE EXTENT OF THE FAILURE 28
EVERY CONSUMER (AUCTIONS EXCLUDED) HAS THE RIGHT TO RECEIVE GOODS WHICH- ARE REASONABLY SUITABLE FOR THE PURPOSE FOR WHICH THEY ARE GENERALLY INTENDED; ARE OF GOOD QUALITY, IN GOOD WORKING ORDER AND FREE OF ANY DEFECTS; WILL BE USABLE AND DURABLE FOR A REASONABLE PERIOD OF TIME THE CONSUMER HAS A RIGHT TO EXPECT THAT THE GOODS ARE REASONABLY SUITABLE FOR THE SPECIFIC PURPOSE THAT THE CONSUMER HAS INDICATED TO THE SUPPLIER. 29
THE ABOVE PROVISIONS DO NOT APPLY TO A TRANSACTION IF THE CONSUMER HAS BEEN EXPRESSLY INFORMED THAT PARTICULAR GOODS WERE OFFERED IN A SPECIFIC CONDITION; AND HAS EXPRESSLY AGREED TO ACCEPT THE GOODS IN THAT CONDITION, OR KNOWINGLY ACTED IN A MANNER CONSISTENT WITH ACCEPTING THE GOODS IN THAT CONDITION. (VOETSTOOTS CLAUSE) IMPLIED WARRANTY OF QUALITY WITHIN SIX MONTHS AFTER THE DELIVERY OF ANY GOODS, THE CONSUMER MAY RETURN THE GOODS TO THE SUPPLIER, WITHOUT PENALTY AND AT THE SUPPLIER S RISK AND EXPENSE, IF THE GOODS ARE OF A BAD QUALITY OR ARE NOT SUITABLE FOR THE PURPOSES THEY WERE PURCHASED, AND THE SUPPLIER MUST, AT THE DIRECTION OF THE CONSUMER, EITHER REPAIR OR REPLACE THE FAILED, UNSAFE OR DEFECTIVE GOODS; OR REFUND TO THE CONSUMER THE PRICE PAID BY THE CONSUMER, FOR THE GOODS. IF WITHIN THREE MONTHS AFTER REPAIR THE DEFECT REOCCURS OR A NEW DEFECT OCCURS, THE SUPPLIER MUST REPLACE THE GOODS OR REFUND THE CONSUMER. 30
THE STRICT LIABILITY PRINCIPLE SECTION 61 INTRODUCES A STRICT LIABILITY PRINCIPLE INTO OUR LAW, WHICH BASICALLY MEANS THAT A CONSUMER CAN HOLD ANY SUPPLIER IN THE SUPPLY CHAIN (ALL SUPPLIERS WHO DIRECTLY OR INDIRECTLY CONTRIBUTE TO THE ULTIMATE SUPPLY OF GOODS OR SERVICES TO A CONSUMER, WHETHER AS PRODUCER, IMPORTER, DISTRIBUTOR OR RETAILER) LIABLE FOR ANY HARM (DEATH, INJURY, ILLNESS, LOSS OR DAMAGE TO PROPERTY AND ANY ECONOMIC LOSS) CAUSED WHOLLY OR PARTLY AS A CONSEQUENCE OF:- SUPPLYING ANY UNSAFE GOODS; A PRODUCT FAILURE, DEFECT OR HAZARD IN ANY GOODS; OR INADEQUATE INSTRUCTIONS OR WARNINGS PROVIDED TO THE CONSUMER PERTAINING TO ANY HAZARD ARISING FROM OR ASSOCIATED WITH THE USE OF ANY GOODS IRRESPECTIVE OF WHETHER THE HARM RESULTED FROM ANY NEGLIGENCE ON THE PART OF THE RELEVANT SUPPLIER. IT MUST ALSO BE NOTED THAT A SUPPLIER OF SERVICES WHO, IN CONJUNCTION WITH THE PERFORMANCE OF THOSE SERVICES APPLIES, SUPPLIES, INSTALLS OR PROVIDES ACCESS TO ANY GOODS, MUST BE REGARDED AS A SUPPLIER OF THOSE GOODS TO THE CONSUMER, FOR THE PURPOSES OF SECTION 61. SECTION 61 BECAME EFFECTIVE ON 24 APRIL 2010 AND IT IS OF UTMOST IMPORTANCE THAT ALL SUPPLIERS TAKE THE RELEVANT STEPS TO PROTECT THEMSELVES FROM LIABILITY CAUSED BY ANOTHER SUPPLIER IN THE SUPPLY CHAIN. 31
SUPPLIER S ACCOUNTABILITY TO CONSUMERS THIS RIGHT PROVIDES PROTECTION TO CONSUMERS IN TERMS OF LAY-BUY AGREEMENTS REGARDING QUALITY AND DELIVERY AND PROVIDES THAT SUPPLIERS IN POSSESSION OF ANY PREPAID CERTIFICATES, CREDITS, VOUCHERS, MEMBERSHIP FEES OR OTHER MONEY BELONGING TO THE CONSUMERS, MUST NOT TREAT SUCH PROPERTY AS THEIRS; EXERCISE CARE, DILIGENCE AND SKILL; AND ASSUME LIABILITY FOR ANY LOSSES SUFFERED BY CONSUMERS IN THIS REGARD, AND PROVIDES THAT A PREPAID CERTIFICATE, CARD, CREDIT, VOUCHER OR SIMILAR DEVICE DOES NOT EXPIRE UNTIL ITS FULL VALUE HAS BEEN REDEEMED OR THREE YEARS AFTER THE DATE ON WHICH IT WAS ISSUED. 32
FIXED TERM AGREEMENTS FIXED TERM AGREEMENTS EXCLUDING EXEMPTED TRANSACTIONS AS WELL AS TRANSACTIONS BETWEEN JURISTIC PERSONS-REGARDLESS OF THEIR ANNUAL TURNOVER OR ASSET VALUE) MAY BE FOR A MAXIMUM PERIOD OF 24 (TWENTY FOUR) MONTHS FROM DATE OF SIGNATURE OF THE AGREEMENT BY THE CONSUMER UNLESS A LONGER PERIOD IS EXPRESSLY AGREED WITH THE CONSUMER AND THERE IS A DEMONSTRABLE FINANCIAL BENEFIT TO THE CONSUMER OR UNLESS DIFFERENTLY PROVIDED FOR BY REGULATION IN RESPECT OF A SPECIFIC TYPE OF AGREEMENT, CONSUMER, SECTOR OR INDUSTRY; A CONSUMER MAY CANCEL A FIXED TERMS AGREEMENT UPON EXPIRY OF THE FIXED TERM OR AT ANY OTHER TIME, BY GIVING THE SUPPLIER 20 (TWENTY) BUSINESS DAYS NOTICE IN WRITING OR OTHER RECORDED MANNER AND FORM (IN WHICH EVENT REASONABLE PENALTIES MAY BE IMPOSED BY THE SUPPLIER) THE SUPPLIER MAY CANCEL THE AGREEMENT ON 20 (TWENTY) BUSINESS DAYS AFTER GIVING WRITTEN NOTICE TO THE CONSUMER OF A MATERIAL FAILURE BY THE CONSUMER TO COMPLY WITH THE AGREEMENT, UNLESS THE CONSUMER HAS RECTIFIED THE FAILURE WITHIN THE STATED TIME; THE SUPPLIER MUST, NOT MORE THAN 80 AND NOT LESS THAN 40 BUSINESS DAYS BEFORE THE EXPIRY DATE OF THE FIXED TERM OF THE AGREEMENT, NOTIFY THE CONSUMER IN WRITING OR OTHER RECORDABLE FORM, OF THE IMPENDING EXPIRY DATE, WHICH MUST INCLUDE A NOTICE OF ANY MATERIAL CHANGES THAT WOULD APPLY IF THE AGREEMENT IS TO BE RENEWED OR MAY OTHERWISE CONTINUE BEYOND THE EXPIRY DATE AND MUST SET OUT THAT THE AGREEMENT WILL AUTOMATICALLY CONTINUE ON A MONTH-TO-MONTH BASIS, SUBJECT TO ANY MATERIAL CHANGES OF WHICH THE SUPPLIER HAS GIVEN NOTICE AS AFORESAID, UNLESS THE CONSUMER EXPRESSLY DIRECTS THE SUPPLIER TO TERMINATE THE AGREEMENT ON THE EXPIRY DATE OR AGREES TO A RENEWAL FOR A FURTHER FIXED TERM; THE CLAUSES RELATING TO EXPIRY AND RENEWAL OF A FIXED TERM AGREEMENT MAY (CROSS REFERENCE BETWEEN ACT AND REGULATIONS ARE WRONG) APPLY RETROSPECTIVELY TO PRE-EXISTING AGREEMENTS FROM 1 APRIL 2011. 33
LEASES THE FACT WHETHER OR NOT A PARTICULAR LEASE AGREEMENT FALLS WITHIN OR OUTSIDE THE SCOPE OF THE ACT WILL HAVE TO BE DETERMINED ON A CASE TO CASE BASIS AND WILL DEPEND ON HOW WIDELY THE ASPECT OF IN THE ORDINARY COURSE OF BUSINESS WILL BE INTERPRETED; SHOULD A LEASE AGREEMENT FALL WITHIN THE AMBIT OF THE ACT, THE FOLLOWING ARE, INTER ALIA, CONSIDERATIONS TO WHICH THE LANDLORD WILL HAVE TO PAY ATTENTION:- THE AGREEMENT MUST BE IN PLAIN AND UNDERSTANDABLE LANGUAGE (UNDERSTANDABLE TO THE TENANT); THE TENANT S ATTENTION MUST BE DRAWN TO ANY TERM IN THE AGREEMENT WHICH WOULD LIMIT THE RISK OR LIABILITY OF THE LANDLORD OR ANY OTHER PERSON, CONSTITUTE A RISK OR LIABILITY BY THE TENANT OR IMPOSE AN OBLIGATION ON THE TENANT TO INDEMNIFY THE LANDLORD OR ANY OTHER PERSON FOR ANY CAUSE OR BE AN ACKNOWLEDGMENT OF ANY FACT BY THE CONSUMER); THE LEASE MUST NOT BE ONE-SIDED IN FAVOR OF THE LESSOR; WARRANTIES WILL BE REGARDED AS BEING INCORPORATED INTO THE LEASE (EXCEPT IN CIRCUMSTANCES WHERE THE TENANT HAS BEEN INFORMED THAT THE PROPERTY IN QUESTION IS OFFERED IN A SPECIFIC CONDITION) AND THE TENANT WILL HAVE THE RIGHT TO RECEIVE THE PROPERTY IN A CONDITION REASONABLY SUITABLE FOR THE PURPOSE FOR WHICH IT HAS BEEN OBTAINED; THE LEASE AND THE LANDLORD MUST COMPLY WITH THE PROVISIONS REGARDING FIXED TERM AGREEMENTS DISCUSSED BEFORE (THIS WILL NOT APPLY WHERE THE TENANT IS A JURISTIC PERSON) AND THE TENANT WILL HAVE THE RIGHT TO CANCEL THE LEASE AGREEMENT ON 20 (TWENTY) BUSINESS DAYS NOTICE. 34
BUSINESS NAMES SECTION 79 PROVIDES THAT A PERSON MUST NOT CARRY ON BUSINESS, ADVERTISE, PROMOTE, OFFER TO SUPPLY OR SUPPLY GOODS OR SERVICES OR ENTER INTO AN AGREEMENT USING A NAME UNLESS DOING SO; IN THEIR FULL NAME AS RECORDED IN THEIR ID BOOK OR ANOTHER RECOGNIZED FORM OF IDENTIFICATION IF THE PERSON IS AN INDIVIDUAL OR IN THE CASE OF A JURISTIC PERSON A REGISTERED BUSINESS NAME INTENDED FOR USE BY THAT PERSON ACCORDING TO THE REGULATIONS OF SECTION 80 OF THE ACT OR ANY RELATED PUBLIC REGULATION. SECTION 80 OF THE ACT SETS OUT THE REGISTRATION PROCEDURE AND SECTION 81 THE CRITERIA FOR BUSINESS NAMES. THE TRANSFER OF BUSINESS NAMES MUST ALSO BE REGISTERED. THESE REGULATIONS ARE NOT YET IN EFFECT AND WILL ONLY COME INTO EFFECT ON A DATE NOT EARLIER THAN 1 YEAR FROM 1 APRIL 2011. 35
ENFORCEMENT OF RIGHTS WHO ARE ENTITLED TO APPROACH THE COMISSION, COURT OR TRIBUNAL TO ENFORCE A CONSUMER RIGHT? A PERSON ACTING ON HIS OR HER OWN BEHALF; AN AUTHORISED PERSON ACTING ON BEHALF OF ANOTHER PERSON WHO CANNOT ACT IN HIS OR HER OWN NAME; A PERSON ACTING AS A MEMBER OF, OR IN THE INTEREST OF, A GROUP OR CLASS OF AFFECTED PERSONS; A PERSON ACTING IN THE PUBLIC INTEREST, WITH LEAVE OF THE TRIBUNAL OR COURT; AN ASSOCIATION ACTING IN THE INTEREST OF ITS MEMBERS. 36
A PERSON MAY SEEK TO ENFORCE ANY RIGHT IN TERMS OF THIS ACT BY REFERRING THE MATTER TO THE APPLICABLE OMBUD WITH JURISDICTION, APPLYING TO THE CONSUMER COURT, REFERRING THE MATTER TO AN ALTERNATIVE DISPUTE RESOLUTION AGENT OR FILE A COMPLAINT WITH THE COMMISSION; OR APPROACH A COURT WITH JURISDICTION OVER THE MATTER, IF ALL OTHER REMEDIES AVAILABLE HAVE BEEN EXHAUSTED REFERRING THE MATTER DIRECTLY TO THE TRIBUNAL, IF PERMITTED (BY LEAVE OF THE TRIBUNAL) 37
UPON INITIATING OR RECEIVING A COMPLAINT IN TERMS OF THE ACT, THE COMMISSION MAY:- ISSUE A NOTICE OF NON-REFERRAL (FRIVOLOUS OR VEXATIOUS, DOES NOT ALLEGE FACTS WHICH CONSTITUTE GROUNDS FOR A REMEDY UNDER THE ACT OR MORE THAN 3 YEARS EXPIRED AFTER CAUSE OF COMPLAINT AROSE OR PRACTICE WHICH CAUSED COMPLAINT CEASED OR A COMPLAINT AGAINST A PERSON WHO IS OR HAS BEEN A RESPONDENT IN PROCEEDING RELATING TO SUBSTANTIALLY THE SAME CONDUCT) (IF THE COMMSSION ISSUES A NON-REFERRAL OTHER THAN FOR THE LAST TWO GROUNDS MENTIONED, THE COMPLAINANT MAY REFER THE MATTER DIRECTLY TO THE CONSUMER COURT OR THE TRIBUNAL (WITH LEAVE OF THE TRIBUNAL). REFER THE COMPLIANT TO AN ALTERNATIVE DISPUTE RESOLUTION AGENT (UNLESS THE PARTIES HAVE PREVIOUSLY UNSUCCESSFULLY ATTEMPTED TO RESOLVE THE DISPUTE IN THAT MANNER); REFER THE COMPLAINT TO ANOTHER REGULATORY AUTHORITY WITH JURISDICTION OVER THE MATTER FOR INVESTIGATION; OR DIRECT AN INSPECTOR TO INVESTIGATE AS QUICKLY AS PRACTICABLE. 38
AFTER CONCLUDING AN INVESTIGATION INTO A COMPLAINT, THE COMMISSION MAY:- ISSUE A NOTICE OF NON-REFERRAL TO THE COMPLAINANT IN THE PRESCRIBED FROM REFER THE MATTER TO THE NATIONAL PROSECUTING AUTHORITY IF THE COMMISSION ALLEGES THAT A PERSON HAS COMMITTED AN OFFENCE IN TERM OF THE ACT; REFER THE MATTER TO THE CONSUMER COURT; PROPOSE A DRAFT CONSENT ORDER; ISSUE A COMPLIANCE NOTICE (IF A PERSON FAILS TO COMPLY THE COMMISSION CAN APPLY TO THE TRIBUNAL FOR THE IMPOSITION OF AN ADMINISTRATIVE FINE OR REFER THE MATTER TO THE NATIONAL PROSECUTING AUTHORITY ) 39
IMPORTANT CONTACT DETAILS NATIONAL CONSUMER COMMISSION (012 394 1436 / 1558/1076); NATIONAL CONSUMER TRIBUNAL (012 663 5615) 40